The Dow Jones Industrial Average gained 19.61 points, or 0.15 percent, to close at 13,145.82, led by Alcoa and Caterpillar , rebounding from a 93-point loss in intraday trading. The blue-chip index is still on track to log its sixth-consecutive month of gains.

The S&P 500 erased 2.26 points, or 0.16 percent, to finish at 1403.28. The Nasdaq slipped 9.60 points, or 0.31 percent, to end at 3,095.36.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished above 15.

“I expect another upleg on the market—we’re still undervalued based on current earnings,” said Cote. “First quarter earnings are going to be stronger relative to consensus and it will be the 11th quarter of significant upside surprise."

Banks were the biggest laggards, led by Janus Capital after Jefferies cut the firm to "hold" from "buy."

Among telecoms, AT&T and Verizon slumped after Baird cut its rating on both wireless providers to "neutral" from "outperform." This comes a day after RBC also slashed its rating on Verizon to "sector perform" from "outperform."

Meanwhile, Sprint helped limit the sector decline after Deutsche Bank's positive comments on the firm. Most notably, Deutsche Bank said that the tests of Sprint's 4G LTE network showed comparable results to those of rivals Verizon and AT&T.

Most health insurers were trading near new highsamid the ongoing Supreme Court hearings on health care. Aetna , Coventry Health and Cigna were among the top gainers.

On the earnings front, Best Buy slumped after the electronics chain posted weaker-than-expected quarterly resultsand added it will close 50 stores and cut 400 positions.

Meanwhile, Red Hat soared to lead the S&P gainers after the business software maker reported earnings that beat estimates and announced a $300 million stock buyback.

Research In Motion is scheduled to post earnings after-the-bell.

Millennial Media surged more than 90 percent in its market debut after the mobile advertising company priced shares at $13 at the high end of its expected range in its initial public offering. And Cafepress closed higher after the custom products retailer priced its shares at $19, above its expected price of between $16 and $18.

On the economic front, weekly jobless claims declined 5,000 to a seasonally adjusted 359,000, hitting another four-year low, according to the Labor Department. But the report still disappointed as economists surveyed by Reuters had expected a reading of 350,000.

And the economy increased at a 3.0 percent annual rate, the fastest pace since mid-2010, according to the Commerce Department in its final estimate.

Treasury prices edged higherafter the government auctioned $29 billion in 7-year notes at a high yield of 1.590 percent and bid-to-cover was 2.72.